Judgment:
THE HONOURABLE Sr.JUSTICE C.V.NAGARJUNA REDDY COMPANY PETITION No.180 of 2011 12-02-2014 Sr.M/S.Ajit Exports,A partnership firm having its office at 93, Mangolpur Khurd, New Delhi-100083,Rep., by its Partner Sh.
Ajit Singh ..Petitioner M/s.MBS Impex Private Limited,Having its Registered office at 1st Floor, M.G.Road, Secunderabad, Andhra Pradesh-500003,Rep.
by its Director Mr.SukeshGupta..Respondent Counsel for Petitioner: Mr.V.S.Raju Counsel for Respondent: Mr.S.Ravi, Senior Counsel for Mr.J.Prabhakar.
HEAD NOTE: ?.CITATIONS: THE HON'BLE Sr.JUSTICE C.V.NAGARJUNA REDDY COMPANY PETITION No.180 of 2011 Dated: 12.02.2014 The Court made the following: ORDER
: This company petition is filed under Sections 433(e) and 439(1)(b) read with Section 434(1)(a) of the Companies Act, 1956 (for short 'the Act').for ordering winding up of the respondent company for non-payment of debt due to the petitioner.
The petitioner has pleaded that it is a partnership firm and that the respondent is a private limited company with authorized capital of Rs.25,00,00,000/- divided into 2,50,00,000 equity shares of Rs.10/- each and its issued, subscribed and paid up capital is Rs.9,65,00,000/- divided into 96,50,000 equity shares of Rs.10/- each.
That the respondent is mainly engaged in the business of manufacture and sale of gold jewellery, that it has approached the petitioner and represented that it had a confirmed export order for manufacture and supply of jewellery to M/S.Samrah Gold Factory, L.L.C., P.O.Sharjah, UAE, and that based on the said representation of the respondent, they have entered into a Memorandum of Understanding (for short 'MOU') on 25.08.2008.
The petitioner further pleaded that under the said MOU, it was agreed that the respondent is responsible for realization of the proceeds from the importer in Sharjah, UAE, for gold jewellery exported, within the timeframe allowed by the Reserve bank of India, that the petitioner shall avail all the benefits of Noida Special Economic Zone (NSEZ).where the manufacturing unit of the petitioner is located, and that the respondent shall pay the due amount to the petitioner firm in Indian rupees and is responsible for realization within the timeframe allowed by Reserve Bank of India.
The petitioner also pleaded that in terms of the said MOU and as per the instructions received from the respondent, it has manufactured and exported gold jewellery to M/S.Samrah Gold Factory, through Indian Airlines.
The petitioner specifically pleaded that it has manufactured the gold jewellery and exported on behalf of the respondent from out of its own raw material (raw gold).It was further pleaded that in accordance with para 9.62 of the Foreign Trade Policy 2004-2009, the invoices raised in the name of the respondent were sent by the petitioner along with other shipping documents to the consignee and that receipt of the goods was duly acknowledged by the importer.
That in terms of the agreement between the parties, the petitioner raised 11 debit notes for a total sum of Rs.70,97,56,084/-, that on 05.09.2008, the respondent paid a sum of Rs.2,00,00,000/- as part payment of the amount of Rs.70,97,56,084/-, that the respondent was indebted to the petitioner in a sum of Rs.68,97,56,084/- as on 26.09.2008 and it is liable to pay interest at 24% per annum from 26.09.2008 till the date of actual payment.
The petitioner further pleaded that in partial discharge of its liability, the respondent has issued two cheques, one for Rs.1,00,00,000/-and another for Rs.10,00,00,000/-, that when the same were presented to its bankeRs.they were returned as dishonoured and that it has initiated proceedings under Section 138 of the Negotiable Instruments Act against the respondent for dishonour of the cheques.
That as the respondent failed to honour its commitment relating to payment of due amounts, the petitioner has sent a statutory notice on 18.02.2011 under Section 434(1)(a) of the Act, calling upon the respondent to make payment in terms of the MOU within the statutory period of three weeks and that the said notice was returned to the petitioner with remarks 'not claimed, return to sender'.
That the petitioner firm, having come to know about the change of registered office of the respondent, again issued another statutory notice through its counsel on 29.08.2011 and that as no reply was received by it to the said notice, it has filed the present company petition, seeking an order to wind up the respondent company for its inability to pay the debt of Rs.117,25,85,391/-.
A detailed counter affidavit has been filed by one P.
Pratap, authorized signatory of the respondent, wherein while admitting that the respondent has availed the services of the petitioner for the purpose of exporting the jewellery to its customer, he has specifically pleaded that the transaction between the parties was only for the manufacture of jewellery out of the raw material of the respondent and for exporting the same.
It is further averred that the respondent paid a sum of Rs.2,00,00,000/- on 05.09.2008 towards manufacturing and other charges and not towards part payment of the amount as shown in paragraph 14 of the affidavit of the deponent in the company petition.
While denying the respondent's liability to pay the sum of Rs.68,97,56,084/- together with interest at 24% per annum from 26.09.2008, the counter-affidavit averred that the two cheques for Rs.1,00,00,000/- and Rs.10,00,00,000/- respectively were not drawn in favour of the petitioner towards the alleged liability and that they were issued in a different context, namely; that the respondent negotiated for buying the petitioner firm subject to the condition that it shall be converted into a private limited company by duly incorporating the same under the Act, that towards this understanding, the respondent agreed to pay an amount of Rs.11,00,00,000/- and accordingly it has issued two post- dated cheques with a clear understanding that the same shall be presented for collection only upon incorporation, that the petitioner cheated the respondent by wrongfully presenting the said cheques for payment even before the said company was incorporated and that the respondent has timely issued the stop payment instructions.
It was further pleaded that the respondent has received only the second statutory notice dated 29.08.2011 and that even before the reply was given, the petitioner has filed the present company petition.
The respondent filed a copy of the reply notice dated 22.09.2011, wherein it has unequivocally denied its liability.
I have heard Mr.V.S.
Raju, learned counsel for the petitioner and Mr.S.Ravi, learned Senior Counsel for the respondent.
At the outset, it needs to be observed that there is no dispute about the manufacturing of jewellery by the petitioner at the request of the respondent and exporting the same to the designated customer of the respondent at Dubai.
The value of jewellery exported by the petitioner and received by the respondent's customer is also not in dispute.
The only dispute, which of couRs.constitutes the core between the parties, is whether the jewellery was manufactured from out of the gold supplied by the respondent or from out of its own gold by the petitioner.
Such a dispute would not have arisen if there were clear terms of understanding between the parties.
The petitioner filed a copy of the MOU, a perusal of which would show that the same is bereft of essential terms such as the quantity of jewellery that was agreed to be exported and whether the jewellery has to be manufactured from out of the gold supplied by the respondent or from out of the petitioner's own gold.
This Court is at a loss to know as to the reason for such a cryptic MOU between the parties while dealing with a very valuable subject matter of the contract, namely; manufacturing and exporting of gold ornaments.
Be that as it may, under Section 433 read with Section 434 of the Act, a company cannot be ordered to be wound up, unless either the debt is admitted or the dispute as to the debt raised by the respondent is not bona fide.
In the absence of a clear understanding between the parties stipulating that the petitioner will manufacture the jewellery from out of its own gold or at least any contemporaneous correspondence between the parties unequivocally proving the claim of the petitioner that it has manufactured the jewellery from out of its own gold and that the respondent has not supplied the gold, it is not possible for this Court to hold that the denial of the debt by the respondent is not bona fide.
The respondent has filed purported vouchers in order to substantiate its plea that it has supplied its own gold under the said vouchers to the petitioner.
However, the petitioner raised a plea that these vouchers are fabricated.
This Court, while exercising its jurisdiction under the Act, will not adjudicate on this disputed issue.
The learned Senior Counsel for the respondent has raised an objection on the maintainability of the company petition on the ground of limitation.
In the view this Court has already taken that the debt claimed by the petitioner is seriously disputed by the respondent and that there is a bona fide dispute on the liability of the respondent, it is not necessary for this Court to deal with the said aspect.
For the above-mentioned reasons, I am of the opinion that the company petition does not deserve to be admitted, as it has not satisfied the requirements of Sections 433 and 434 of the Act.
Accordingly, the company petition is dismissed, with liberty to the petitioner to avail any other remedy in accordance with law for recovery of the alleged dues from the respondent.
________________________ C.V.NAGARJUNA REDDY, J12h February, 2014